• Thu. Jun 13th, 2024

Kimberly-Clark Reboots with $1.5 Billion Restructuring Plan Amid Declining Sales and Competition.

BySamantha Johnson

Mar 27, 2024
Kimberly-Clark announces business reorganization, expects $1.5 billion in costs

Kimberly-Clark, the renowned Kleenex tissue maker, has announced that it will be restructuring into three business units to simplify operations and cut costs. The Irving, Texas-based consumer goods company expects to incur about $1.5 billion in related expenses over the next three years, with half of this amount being cash costs. Although the specific number of jobs to be cut remains unknown, workforce reductions are expected to make up a significant portion of these expenses.

This restructuring comes as Kimberly-Clark faces challenges such as inflation-stricken customers opting for more affordable alternatives and losing shelf space at retailers to cheaper private-label products. Like its competitors Procter & Gamble and Unilever, Kimberly-Clark is also facing difficulties from declining sales due to rising prices.

Kimberly-Clark’s newly organized segments will consist of its North American business, the international personal care segment, and the international family care and professional businesses. Previously, the company had three business segments with three geographic subdivisions each. The company’s supply chain modernization plans aim to generate over $3 billion in gross productivity and $500 million in working capital savings that will be used for growth investments.

The company expects to complete its transition to the new organizational structure by the end of 2024. These actions are projected to deliver approximately $200 million in selling, general, and administrative savings over the next few years. In January, Kimberly-Clark fell short of fourth-quarter sales and profit estimates and cautioned that weak retail inventories could result in flat volumes in the first quarter. As a result of the announcement, Kimberly-Clark’s shares were up 1.5% before the market opened.

In summary, Kimberly-Clark is restructuring into three business units as part of an effort to simplify operations and reduce costs while also facing challenges such as declining sales due to rising prices and losing shelf space at retailers to cheaper private-label products. The company expects to complete its transition by 2024 and generate significant savings through supply chain modernization plans while also reaffirming its annual organic net sales and adjusted profit targets provided earlier this year.

By Samantha Johnson

As a dedicated content writer at newsanguinely.com, I weave words into compelling stories that captivate and inform our readers. With a passion for storytelling and a keen eye for detail, I craft engaging articles that shed light on the latest news and trends. When I'm not typing away at my keyboard, you can find me exploring new ideas, researching diverse topics, and striving to deliver content that resonates with our audience. Join me on this journey as we uncover the stories that matter most.

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